Welcome to Thomas Insights — every day, we publish the latest news and analysis to keep our readers up to date on what’s happening in industry. Sign up here to get the day’s top stories delivered straight to your inbox.
They’ve done it again. With a press release just ahead of Prime Day, Amazon’s annual online-sale-extravaganza, the e-tailer has announced free one-day shipping coast-to-coast on over ten million products. It’s the next in a recent flurry of supply chain disruptions from the industry innovator.
Here’s the twist: Amazon has built a system to support the new service by hijacking its own existing talent pool for delivery drivers.
One-Day Delivery: A New Standard
Amazon’s official statement makes the concept sound effortless:
“We obsess over making customers’ lives easier, better and more fun with Prime. In fact, Amazon customers in thousands of cities and towns across 44 major metropolitan areas already have access to millions of items with free same-delivery. Simply look for items marked as eligible for delivery today, order before lunch, and get them by bedtime.”
The company further elaborates that their tried-and-true delivery network is the result of over 20 years of careful, strategic construction, all with the customer experience held firmly in mind. It includes 110 fulfillment centers, 40 package sortation centers, 100 delivery stations, and 20 air gateways, all supported by top-of-the-line tech.
Quit and Deliver
While Amazon’s existing network is truly impressive — the company catapulted to the lead of the e-commerce market in less than two decades — building the new service will require even more support. They’ve devised the obvious solution to acquire more manpower and incentivized their current employees to quit.
Under a new incentive program introduced in May, Amazon will fund up to $10,000 in start-up costs and provide three months of pay to any employee who chooses to abandon their staff gig and start an independent last-mile delivery business. The offer is low-risk and high reward, with benefits for everyone involved.
“We’ve heard from associates that they want to participate in the program but struggled with the transition,” says Dave Clark, senior vice president for the company’s worldwide operations. “Now we have a path.”
Any employee who chooses to take Amazon up on the cash offer also gets guaranteed business: a steady supply of packages awaits new drivers. They can also access new technology and training, and exclusive discounts to cover things like insurance, uniforms, and equipment.
Bryan Wyatt, a transportation specialist at Chainalytics, applauded Amazon’s strategy for taking advantage of established brand ambassadors. “They put them in arguably one of the most important positions in the company and that’s directly customer facing,” he said.
The lean solution joins a rapidly growing pool of new logistics strategies that combat the challenges of last-mile delivery.
Driver shortages, long travel times, and traffic congestion are just the beginning of the struggles that Amazon aims to eliminate with its reinvented workforce, and the company is far from alone in the fight. Long-time leaders like the USPS and FedEx are also looking to tackle last-mile delivery troubles, introducing expanded package services and new technology to support quicker turnaround times.
Image Credit: Franks Gaertner/Shutterstock.com